Bitfinex Weekly Briefing (0919-0925)
secondary title
Bitfinex CTO Paolo Ardoino: Ethereum Cannot Compete With Bitcoin as a Form of Currency
American entrepreneur and former CEO of business strategy firm MicroStrategy Michael Saylor has stepped up his promotion of Bitcoin (BTC), releasing a statement comparing the most traded cryptocurrency to physical property.
In his argument, BTC has better physical properties than ordinary assets. He made the statement at the Australian Cryptocurrency Conference.
Saylor analyzes the issues involved in the transfer of physical value such as gold, stocks or equity, and real estate. Additionally, he mentions that these physical properties are difficult to move across geographic locations, especially in large numbers.
“If you have property in Africa, no one is going to want to rent it out to you if they live in London. But if you have $1 billion in bitcoin, you can lend or rent it to anyone in the world,” He said.
Additionally, he highlighted BTC's unique design as it can be transferred across locations and across generations; from father to child to grandson, a trend that continues.
This is unlike many other assets that are affected by geographic tensions that prevent them from accessing specific areas. Saylor insists that ownership of the cryptocurrency can span more than 250 years.
Unlike physical property, which incurs high maintenance and tax costs over the years, Bitcoin is different.
https://www.bitcoininsider.org/article/185124/bitcoin-advocate-michael-saylor-compares-coin-physical-properties
secondary title
Bitfinex Alpha | The haze of CPI data obscures the positive of Ethereum merger?
All eyes are on the FOMC meeting this week. It is almost universally agreed that we will see another 75 basis points in interest rates, taking the fed funds rate above 3%. Last Tuesday's consumer price inflation (CPI) report came in well above expectations, a strong backlash against the reality that not only did consumer prices not ease as expected, but that price pressures appeared to be building up. Following this week's decision, we expect more rate hikes to come.
All risk assets were hit. In equities, the sell-off immediately after the CPI report was the worst for stocks since June 2020, with the S&P 500 and Nasdaq down 4.3% and 5.1% on the day, respectively. Gold, the "safe haven" asset, also fell 1.5 percent.
In Europe, too, there is great pain, and we continue to delve into the continent's economy, where Russian President Vladimir Putin has continued to squeeze Europe's energy supplies since the conflict in Ukraine began, causing manufacturing to struggle. Stalled, households face higher utility bills.
Last week’s macro backdrop was so dramatic it almost overshadowed another major event of the week – the Ethereum merger. The successful completion of the merger is a major achievement not to be underestimated; however, the after effects are interesting. As expected, Ethereum’s hash rate dropped to zero, while mining activity on Ethereum Classic and Ethereum PoW surged. In addition, there was a large amount of ETH flowing into exchanges, reaching the highest level since March, and the total flow since February 2019 has not been recorded. This undoubtedly led to the sell-off of the merged ETH. On the bright side, however, there are also a growing number of addresses holding 32 ETH — the amount required to stake ETH alone to run an Ethereum node and act as a validator. The total number of ETH addresses is slightly below the all-time high for addresses reached in November 2020 — a potentially bullish long-term signal for the second-largest cryptocurrency.
Solana NFT has also been making a strong comeback and re-approaching all-time highs. We shed light on complaints about ETH PoW that have arisen since the merger, as well as more details from the White House releasing its first crypto regulatory framework and the SEC's Gensler, suggesting additional scrutiny for proof-of-stake cryptocurrencies.
https://blog.bitfinex.com/bitfinex-alpha/bitfinex-alpha-cpi-overshadows-the-merge/
secondary title
Bitfinex Adds Contract Trading for ETHW Trading Pair
We are pleased to announce that the ETHW/USDt and ETHW/USD currency pairs have been added to our futures trading portfolio.
Margin trading enables traders to borrow funds to increase leverage, offering greater profit potential than traditional trading. Still, the potential for greater returns comes with a higher level of risk, especially given the volatility of digital assets.
https://www.bitfinex.com/posts/839
secondary title
El Salvador's long and winding road to financial freedom
El Salvador has started its sovereign debt buyback program, which was launched in the summer amid rumors of a default and economic crisis in the Central American country. El Salvador will officially pay $910 for bonds due in 2023 and $540 for bonds due in 2025. It also assured investors that it would not default on its bonds.
Although the repurchase program is capped at $360 million, the total value of each bond is $800 million. This is an effort to bring confidence to the market. The buyback program will run from September 12 to 20, with funds expected to be disbursed on September 22, 2022.
Last year, Bukele announced his plans for a bitcoin fiat currency, launching a government-backed bitcoin wallet called Chivo and airdropping $30 in bitcoin to every citizen to promote financial inclusion and encourage the use of bitcoin in El Salvador. coin, thus attracting public attention.
Bukele’s visionary plan to use Bitcoin as a means of self-reliance to advance the country has made him a legend in the crypto community, and his vision seems to be shared by many Salvadorans. Bukele is one of the most popular presidents in El Salvador's history, with an approval rating of around 90%.
Bukele’s goal for Bitcoin adoption in El Salvador is to provide his citizens the opportunity to transact in the wider global economy, a country that is 70 percent unbanked and whose domestic economy is almost entirely cash-based.
Geopolitically, bitcoin adoption also means helping the country out of its sovereign debt crisis and reliance on the dollar, since decisions such as setting inflation and interest rates take place in Washington, where Salvadorans have no say in the direction of the dollar. They use it to earn, spend and save.
Another goal of the Bitcoin law is to simplify the remittance process and reduce fees for Salvadorans to send and receive funds both at home and abroad. El Salvador is one of the world's largest recipients of remittances, with Salvadorans paying more than $400 million a year to remittance services such as Western Union and MoneyGram.
Or, by using Chivo ATMs, they can instantly send funds back home via Bitcoin and the Lightning Network, with no fees. Fifty Chivo ATMs have been installed in many US cities with large Salvadoran populations, as well as throughout El Salvador.
Bukele has been seeking more traditional solutions beyond the Bitcoin law to help alleviate the nation's financial woes, and this bond buyback program is one example. Bukele is serious about achieving financial freedom and improving the lives of ordinary Salvadorans and is using every tool at his disposal.
Nayib Bukele's bitcoin-focused policies have drawn plenty of criticism from political opponents, entrenched traditional financial interests, and mainstream media, but he remains popular with El Salvador's citizens. El Salvador’s unorthodox and courageous Bitcoin experiment has also caught the attention of many developing countries in similar economic straits.
In May, El Salvador hosted representatives from 44 developing country central banks eager to learn as much as possible about El Salvador’s first-hand experience in implementing bitcoin as a legal tender and using it to promote financial inclusion.
Attendees from Ghana, Pakistan, Costa Rica, Jordan, and many more countries from around the world came to learn about the possibilities presented by Bitcoin and Lightning Network adoption. Many of these countries are already at high risk of debt crises.
Shortly after El Salvador’s bitcoin legal tender law, the Central African Republic also decided to adopt bitcoin as legal tender.
In addition to El Salvador and the Central African Republic, the Portuguese autonomous island of Madeira and the semi-autonomous private city of Prospera in Roatan, Honduras have since issued similar announcements to adopt Bitcoin as legal tender.
Bitcoin could be a tool to free these developing countries and autonomous communities from risky sovereign debt and put them on a more equal footing with larger, wealthier nations. Bitcoin could be the path to self-sovereignty on a nation-state level, providing financial inclusion for all.
El Salvadoran President Nayib Bukele appears to genuinely care about improving the quality of daily life for the millions of Salvadorans he has brought on board for his Bitcoin adventure. For that, he should be admired and applauded.
History is made by those who dare to take a principled stand against the status quo. Bukele has undoubtedly secured his place in history and his political wisdom will likely be admired by future generations.
https://blog.bitfinex.com/education/el-salvadors-long-winding-road-to-financial-freedom/
secondary title
Paolo Ardoino: Bitcoin Mass Adoption, Digital Currency Freedom Can Only Come Through Lightning Network
A recent joint report by Boston Consulting Group, Bitget, and Foresight Ventures predicts that the number of crypto users will reach 1 billion by 2030. The report states that the industry is in the early stages of adoption, with "substantial growth ahead".
Despite clear signs of substantial market growth in the coming years, skeptics still question the validity and sustainability of cryptocurrencies such as Bitcoin as a widely accepted method of payment. Specifically, scalability issues have repeatedly been a major obstacle to their widespread adoption.
Bitcoin's focus on security and decentralization limits its ability to process high-throughput transactions within the network in a short period of time. Critics have often highlighted the fact that, without the ability to quickly process large volumes of transaction data, receiving payments for as little as a cup of coffee would result in fees exceeding the price of the drink itself.
If Bitcoin is to reach its full potential and become a payment method in the alternative financial system, users must be able to execute transactions quickly and at low cost. This is where the Lightning Network comes into play, and why mass adoption of the network is critical to Bitcoin's success as the real choice for everyday payments.
The Lightning Network is a layer-two protocol designed to facilitate large-scale micropayment channels by taking transactions off-chain and enabling them to be completed in seconds and at a fraction of the cost.
According to BitcoinVisuals, at the time of writing, the Lightning Network has a capacity of 4,700.623 bitcoins of liquidity flowing through the protocols. As the capacity of the Lightning Network has grown steadily over the past year, even in the face of a bear market, this growth in utilization is evidence that the technology powering these systems is still in its infancy.
Bitcoin adoption in the real world is growing
Bitcoin has seen rapid growth and adoption, even being adopted as legal tender in emerging economies such as El Salvador and the Central African Republic. The Lightning Network enables brick-and-mortar stores in these countries to accept bitcoin as payment for a Big Mac or Frappuccino via mobile devices.
The widespread acceptance of small cryptocurrency transactions for everyday goods and services doesn't stop there. Payment apps such as El Salvador's Chivo Wallet offer low-cost, high-speed transactions, while Cash App integrated the Lightning Network in February to offer its customers zero-fee bitcoin payments. With this widespread adoption, the Lightning Network’s payment volume has grown by 410% over the past year, and its popularity has skyrocketed. In addition, according to a report by Arcane Research, more than 80 million people can use Lightning Network payments in March this year, compared to only 100,000 people in August 2021.
As more and more cryptocurrency exchanges integrate the Lightning Network into their platforms, the number of people with access to low-cost, high-speed payments will only continue to grow, making the payments industry ripe for disruption. Even crypto-skeptical superpowers are taking notice, as two U.S. senators introduced legislation this summer to make small cryptocurrency transactions tax-free.
But the benefits of the Lightning Network go beyond letting everyday users pay at low cost and at high speeds on the go. Some companies are even exploring how to take this financial freedom tool and apply it to protecting free speech.
Protecting Free Speech with Bitcoin
True decentralization and financial freedom cannot be achieved without freedom of speech, communication and privacy. While the value of Lightning Network payments lies in its ability to scale low-cost, high-speed cryptocurrency transactions to more people, there is another important utility.
As companies are leveraging Lightning Network technology, some are exploring its use for highly secure and private video conferencing or direct messaging. Much has been written about how Big Tech collects user data and sells it to the highest bidder, making this space open to disruption as well. True decentralization can be achieved by offering viable alternative messaging apps such as Strike, Sphinx or Bitrefill which are easy to use, fast, free and private.
https://bitcoinmagazine.com/culture/bitcoin-adoption-freedom-via-lightning
secondary title
Bitfinex Opens Tether (USDt) Deposits and Withdrawals on Polkadot (Statemint)
We are pleased to announce that Bitfinex customers will be able to deposit and withdraw USDt on the Bitfinex platform using the transport layer of the Polkadot network starting September 23rd at 3:00 pm.
USDt has been integrated into Polkadot, a network protocol that allows arbitrary data (not just tokens) to be transferred across blockchains. The integration of USDt with Polkadot reduces confirmation times, speeds up payments, and reduces transaction costs.
The launch of USDt on Polkadot will further expand its reach to different chains including Ethereum as it solidifies its position as the largest stablecoin by market capitalization.
https://www.bitfinex.com/posts/840
